Three companies bid a record-shattering $405.1 million to nab U.S. rights to build offshore wind farms near Massachusetts on Friday, a testament to the surging appeal of renewable power and investors’ confidence in state demand for it.

Equinor Wind US LLC, Mayflower Wind Energy LLC and Vineyard Wind LLC each pledged $135 million to secure individual leases from the U.S. government, drawn by state pledges to buy offshore wind power. Mayflower is a joint venture of EDF Renewables Development Inc. and Royal Dutch Shell Plc’s Shell New Energies US LLC.

The auction raked in more than nine times the previous high-water mark: a 2016 sale of an offshore wind lease near New York to Equinor ASA for $42.47 million. Each of the winning bids also approached the highest sum paid for oil drilling rights in the Gulf of Mexico since the start of area-wide leasing: $157 million that Equinor spent nabbing a single 5,760-acre tract in 2012.

This time, the companies were jockeying over three leases spanning nearly 390,000 acres (157,800 hectares) south of the resort islands of Martha’s Vineyard and Nantucket where they could install turbines to generate electricity from wind. The location gives them a chance to serve power-hungry cities along the U.S. East Coast and help satisfy state pledges to buy renewable energy.

“These $100 million-plus bids reflect the strength of state commitments to offshore wind,” Cheryl Wilson, an analyst at Bloomberg Intelligence. “They’re creating momentum for an offshore industry in the Northeast.”

Revenue from the wind auction flows to U.S. government coffers. There are parallels to offshore oil leasing, with energy companies bidding on drilling rights and paying royalties on eventual crude and natural gas production. But the wind leases sold Friday are at least 22 times the size of a typical U.S. offshore oil block, at 127,388, 128,811 and 132,370 acres.

The sale spanned two days and unfolded over 32 rounds, with companies submitting anonymous electronic bids that grew rapidly from $254,776. Eleven companies were actively bidding at the beginning of the auction on Thursday morning, nearly twice the most-recent record for participation, in 2016, when six developers competed for the New York offering. But by Friday morning, just four remained.

The frenzy reflects growing interest in U.S. offshore wind since 2016, when the nation’s first such facility, a 30-megawatt facility development near Block Island, Rhode Island, went online.

“The intense competition we’ve seen in this offshore wind lease auction is completely unprecedented,” said Nancy Sopko, director of offshore wind policy at the American Wind Energy Association. “Global businesses now recognize the potential of America’s world-class offshore wind resources.”

Playing Catch-up

Wind developers are being lured to American waters by near-guaranteed demand, as coastal states ratchet up commitments to buy renewable electricity. Massachusetts doubled its goal for buying offshore wind to 3,200 megawatts in August.

If fully developed, the Massachusetts leases could support approximately 4,100 megawatts of commercial wind generation, enough electricity to power nearly 1.5 million homes, according to the Bureau of Ocean Energy Management.

“Looking up and down the East Coast—and specifically in the Northeast—we see states with huge commitments to buying this power,” Sopko said. “That is driving incredible demand for this energy.”

Declining installation costs and uncertainty about the timing of the next U.S. sale of an offshore wind lease helped feed interest. Analysts also describe growing investor confidence in the stability and predictability of the market, as President Donald Trump continues making territory available for new projects. The U.S. has held eight auctions of federal offshore wind rights since the Obama administration started competitive lease sales in 2013, including two under Trump.

Equinor’s victory gives the Norwegian energy company a second U.S. offshore wind lease, building on its existing holding east of New York. State requests to buy renewable power are key to the company’s “great confidence in the U.S. market,” Christer af Geijerstam, president of Equinor Wind US, said in a phone interview.

The acquisition “gives us a foothold to engage in the Massachusetts and wider New England market, a region notable for its strong commitment to offshore wind,” af Geijerstam said. “This is a long-term bet, because it is relying on the states to actually act their ambitions when it comes to offshore wind, but we think that we will prove ourselves to be competitive.”

Shell’s collaboration with EDPR Offshore North America represents a chance to expand its U.S. wind portfolio beyond existing onshore facilities in California, Texas and Wyoming.

“Shell sees offshore wind in the U.S. as a great opportunity to grow our power business and bring clean energy and economic benefits to the people of Massachusetts,” said Dorine Bosman, vice president of Shell Wind Development.

Rising Demand

U.S. offshore wind power is expected to surge over the next decade—reaching 10,000 megawatts by 2030, compared to just 30 megawatts installed in the water today, according to Bloomberg New Energy Finance.

“Just three years ago, these lease areas had no bidders at all,” noted Liz Burdock, president of the Business Network for Offshore Wind. “This strong interest from the offshore wind marketplace demonstrates the economic potential of the offshore wind industry.”

To keep momentum, industry experts say the Trump administration needs to plan more offshore wind sales, beyond a possible auction of territory near New York in early 2020. The National Ocean Industries Association has pushed the government to conduct at least four auctions annually, arguing a reliable inventory of regularly scheduled sales is necessary to sustain interest.

“Today’s euphoria is tempered a bit by knowing that we had eight companies not win leases, including someone willing to invest $120 million in America for a lease but instead left the sale empty handed,” said Tim Charters, vice president of the group.